08/28/2001 11:00PM

Regulators move to stop TVG taking New York bets

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Television Games Network is allowing New York residents to open telephone betting accounts with TVG, a decision that has drawn the attention of state regulators who contend the practice is illegal.

New York is one of at least nine states that TVG, the 24-hour horse race broadcasting and wagering network, recently added to a shortlist of states targeted for new accounts.

In response, the New York State Racing and Wagering Board has warned the New York Racing Association and two harness tracks that their signals will be pulled from Television Games Network and another service, Youbet.com, if those companies accept any bets from New York.

The board issued the warning at the end of July after learning that TVG considered New York an open state, Michael Hoblock, the board's chairman, said on Wednesday. Hoblock said that state racing law prohibits any out-of-state company from taking wagers in New York. "The statute is pretty clear," Hoblock said.

TVG and Youbet officials did not return phone calls on Wednesday.

Three months ago, the company said on its Web site that it accepted wagers from only five states, but the site now says that bets are being accepted in 14 states: Alabama, Indiana, Kentucky, Louisiana, Maryland, New Mexico, New Hampshire, New York, North Dakota, Ohio, Oklahoma, Oregon, and Wyoming. In addition, a customer-service representative reached at TVG's toll-free phone number said that the company allows residents of New York to open accounts.

Early on Wednesday, Barry Schwartz, chairman of NYRA, said that he was not aware that TVG was taking bets in New York. Later that day, Schwartz said that NYRA had prepared a letter telling TVG "that they cannot take bets on our races or we would have to pull the signal."

NYRA provides its signal to TVG under an agreement that gives the network the exclusive rights to broadcast NYRA's races outside New York into homes and over the Internet.

Relations between NYRA and TVG have been strained since early summer, when the association dropped TVG and Churchill Downs from its bid to buy New York City Off-Track Betting Corporation. NYRA's bid was passed over in August when New York City Mayor Rudolph Giuliani selected a partnership headed by Magna Entertainment as the winning bidder.

TVG, which is owned by telecommunications giant Gemstar-TV Guide Inc., is basing its recent expansion effort on legislation that was passed last year that modified the federal Interstate Horseracing Act, officials have said in the past. Some legal experts contend that the language gives federal approval to interstate account betting as long as parimutuel wagering is legal in the state where the bet was placed and where it was accepted.